Accepting refugees makes the most economic sense

May 30, 2018

As the Government announces it will take 12,000 additional refugees, it’s worth nothing that the data shows a generous intake is likely to be the most economically sound immigration policy of all, writes Tim Dunlop.

In amongst all the angst, claim and counterclaim about Australia’s approach to asylum seekers – especially with the matter of the Syrian refugees in the news – we need to remember just how vital immigration has been to the success of post-war Australia.

In making that case, it is important to look at the data, so let’s begin with a little-reported story that captures in detail the benefits of a generous approach to immigration, and then let’s look at some of the broader figures on the matter.

The Karen people are a diverse group who live mainly in south and south-eastern Burma. They have often been the subject of ethnic violence and other ongoing forms of persecution.

Since 2010, 160 Karen have resettled in Nhill as part of a government program to move refugees into rural areas.

The report notes that Nhill itself is a “conservative community” and that at the time it was suffering from “a declining working-age population, which has had flow-on implications for the economic and social prosperity of the town”.

The main employer in the area was (and is) the Luv-A-Duc food processing centre and it was having trouble getting staff for a mooted expansion. The report says “Luv-a-Duck management identified the Karen as potential employees”.

The scheme has been incredibly successful:

Through a staged recruitment and resettlement process, the Karen community now comprises approximately 10% of the Nhill population, including significant numbers of working age adults and families with young children.

…A total of 70.5 Full Time Equivalent (FTE) positions have been added to the regional economy over the five year period of analysis, representing approximately 3% of total employment across Hindmarsh.

The economic impact of this increased labour supply, in terms of Gross Regional Product – as modelled by Deloitte Access Economics, is estimated to be $41.5 million in net present value terms.

The wider benefits to the town are also worth noting. The CEO of the Shire Council has said:

The social impact of the Karen settlement is extraordinary. Nhill has embraced and opened their minds and hearts to the Karen. This has made Nhill a better place to live.

What really stands out in the report, though, is how important it is to have strong political and community leadership, and how important it is to work with, and honestly explain to locals the way such a scheme is designed to work.

The report notes:

While critical, employment is not of itself sufficient for successful resettlement and a number of other contributing factors have been identified.

These include:

• strong leadership in the host community;

• a host community which is well prepared for the new settlers;

• initial accommodation for the new arrivals;

• support for the new families;

• management of the degree and complexity of “cultural adjustment” on both sides;

Such discrimination simply isn’t necessary and calls for it are the opposite of the sort of leadership that is needed. (In case you are wondering, the “majority of Karens are Theravada Buddhists who also practice animism, while approximately 35 per cent are Christian.”)

And although the example of Nhill might be a relatively small case, we should remember that it is really just a microcosm of a much bigger project, one that goes by the name of post-war Australia: Nhill is Australia writ small.

The bigots who want to limit refuge to Christians conveniently forget how successful our post-war, non-discriminatory immigration policies have been. Yes, they will yelp about how “generous” we are, but their next breath is always about finding ways of limiting that “generosity”.

But that is likely to be exactly the wrong approach.

Part of the problem is we have surprisingly little data about the economic effects of humanitarian immigration to really be able to make informed decisions.

…While almost two-thirds of migrant taxpayers were migrants with a Skilled visa – reporting $26 billion in Employee income – Humanitarian migrants displayed greater entrepreneurial qualities and reported a higher proportion of income from their own unincorporated businesses and this income increased sharply after five years of residency. (Emphasis added.)

Think about that the next time someone says we need to lock up more asylum seekers in offshore detention centres. (Or some ill-informed backbencher tweets somethings like this.)

We’re currently spending $1 billion a year detaining asylum seekers offshore. That’s more than five times the United Nations refugee agency’s entire budget for all of South-East Asia.

It’s utterly crazy.

Given the ABS figures – and going beyond basic humanitarian considerations – consider what an absolute waste of money such detention is and what potential benefits await us if instead of locking people away to rot, we allowed them to live out their potential.

It might be bad news for those who want to keep asylum seekers out for other reasons, but let’s be clear: the data shows that a generous immigration policy is likely to be the most economically sound immigration policy.